Suzlon Energy shares slide 11% in 4 days. Should you buy, sell or hold?

Shares of Suzlon Energy extended their losing streak on Monday, falling as much as 5.7% to Rs 60.06 on the BSE and marking a four-day decline of 10.6%. The slide comes in the wake of the company's first-quarter results that fell short of expectations on profit after tax, coupled with news of the impending exit of the company’s group chief financial officer.

The stock is now trading below all eight of its key simple moving averages, spanning 5-day through 200-day charts, underscoring bearish sentiment across short-term and long-term horizons. The Relative Strength Index stands at 35.4, close to oversold territory, while the Moving Average Convergence Divergence at -0.9 remains below both centre and signal lines, reinforcing the weakness.

Q1 results weigh on sentiment

Suzlon’s June-quarter consolidated net profit rose 7% year-on-year to Rs 324 crore, but missed estimates due to a deferred tax charge of Rs 134 crore. Revenue surged 55% to Rs 3,117 crore, driven by higher turbine volumes, and EBITDA jumped 62% to Rs 599 crore with margins expanding to 19.2%. The company’s order book grew for a 10th straight quarter, rising by another 1GW.

Investor concerns deepened after Suzlon said Group CFO Himanshu Mody will step down effective August 31, with a successor to be named shortly.

Brokerages remain divided

Brokerages were quick to weigh in after Suzlon’s Q1 results, with three out of four major research houses maintaining bullish calls despite the recent correction.

Motilal Oswal reaffirmed its ‘Buy’ rating and pegged a target price of Rs 80. The brokerage cited “strong execution at 444MW” in Q1, a 62% jump year-on-year, along with a healthy 19% EBITDA margin.

The brokerage said that while adjusted profit after tax missed estimates due to a Rs 1.34 billion deferred tax charge, prospects such as a potential 700MW deal with Tata Power and improving per-MW realisations supported the positive view.

ICICI Securities echoed that optimism, retaining a ‘Buy’ call with a Rs 76 target. The brokerage noted Suzlon’s “highest-ever Q1 execution” and pointed to the 5.7GW order book, about 3.7 times FY25 execution levels, as a major strength. It highlighted the government’s domestic sourcing mandate for wind components as a structural advantage for Suzlon, given its roughly 40% market share.

JM Financial also stayed bullish, reiterating a ‘Buy’ rating with a Rs 78 target price. It credited operating leverage for the company’s margin improvement, with the wind turbine generator segment’s EBIT margin expanding to 15% from 10% a year earlier.

The brokerage, however, cautioned that while deliveries have been strong, installations have lagged in recent quarters.

Nuvama Institutional Equities struck a more cautious note. It kept a ‘Hold’ rating and trimmed its target to Rs 67, citing a weaker EPC mix that dented realisations. The brokerage also flagged the resignation of CFO Himanshu Mody as a potential short-term negative, stressing that he played a key role in Suzlon’s turnaround.

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Outlook anchored in domestic demand

Suzlon continues to guide for 60% growth in deliveries, revenue and EBITDA in FY26. Brokerages expect the company to benefit from India’s 122GW wind capacity target by FY32 and a growing commercial and industrial segment that may require 78GW by FY30.

Execution challenges around land and grid connectivity remain, but bullish calls rest on Suzlon’s dominant domestic market share, cost efficiencies and a swelling pipeline.

Also read | Suzlon Energy Q1 results: Cons PAT jumps 7% YoY to Rs 324 crore; revenue soars 55%
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)